Policies and Procedures
Policy 802 – Internal Loans
March 13, 2006
March 11, 2010
Director of Treasury and Risk Management Services
Treasury and Risk Management Services
Internal loans are utilized to fund the purchase of equipment and other short-lived assets and to cover short-term financing needs created by cash flow-timing issues for capital projects. Internal loan requests should be for financing needs in excess of $250,000.
This policy defines the general terms of the loan agreement, the interest rate on the loan, and the repayment method.
Up to ten years, not to exceed the useful life of the financed asset, as established by generally accepted accounting principles, and the duration of the cash flows used to repay the debt.
The interest rate will be established by the Budget Committee at the time of the potential loan approval and will be based upon a combination of considerations, including but not limited to current interest rates, the term of the loan, the University’s cost of funding, and the riskiness of the project.
Interest will accrue on a monthly basis and be assessed on the total loan amount outstanding to include principal advanced and accrued interest to date. Principal and interest payments will be structured to match up with the timing of the primary source of repayment.
Internal Loans are approved by the University's Budget Committee through the approval process outlined in the accompanying procedure.
Reason for Policy
To provide University schools or departments with a funding mechanism for short-term financing needs.
- 802.1 - Requesting an Internal Loan
Frequently Asked Questions
|Internal Loans||Treasury Operationsfirstname.lastname@example.org|
March 11, 2010